Did you know that Middlesbrough is one of the best buy-to-let locations in the UK to invest in? In fact, in December, Zoopla ranked this northeast town amongst its top 5 highest-yielding areas. Nevertheless, due to its size and varied housing stock, property prices and rental rates vary across the borough. So, if you’re considering investing in a buy-to-let property and want to maximise your return, keep reading. In this guide, we’ll outline where to get the best Middlesbrough rental yields, from the town’s student-centric heart to its quieter suburbs.
Average Middlesbrough rental yield by property type
Home.co.uk says the average renter in Middlesbrough pays £706 per calendar month across all property types. This may sound low, given that the national average currently sits at just over £1,000pcm (excluding London). However, house prices are also considerably lower in Middlesbrough, making your upfront costs and mortgage repayments more affordable. The result: a faster and more significant return on your investment. Here’s what you can expect to make as a Middlesbrough landlord (before expenses)* by property type and/or number of bedrooms:
Flats/apartments
Unsurprisingly, flats typically fetch the lowest price of all Middlesbrough properties – currently £57,375 on average. Yet, depending on their location and size, they can bring in more rental income than some terraces in Middlesbrough. This may be due to many students and young professionals wanting to live at the heart of the action. Or it may be down to stretched renters seeking homes that are cheaper to run (heat, power, council tax, etc). Whatever the reason, based on a rate of £692pcm, you could see a huge annual yield of almost 14.5%!
Terraced houses
Meanwhile, terraced properties are popular amongst couples and small families who’d like a little more space without having to stretch their budget. And in Middlesbrough, these two-up-two-downs dominate the town centre. With that in mind, you can snap one up for just over £81k – much less than a semi. Then let it out to those working or studying locally. And with two-bed houses in Middlesbrough bringing in £624pcm, a healthy return of 9.23% awaits. Or you could let multiple rooms out in a home near the University to generate the best Middlesbrough rental yields possible.
Semi-detached homes
Slightly further afield in the town’s inner and outer suburbs, you’ll find plenty of roomier semi-detached homes. And although these require a more substantial investment, they are also the most in-demand properties nationwide. Not only because they are larger than terraces but also because they have gardens and parking. Plus, they tend to be located in quieter residential areas – ideal if you want to attract families or older tenants. You’ll need around £153,490 to buy a 3-bed semi in Middlesbrough, and you can expect a 5.79% return from a £741pcm rate.
Detached properties
Alternatively, how about a detached home if you’ve got the budget? While they cost more to purchase and provide lower yields, they usually attract longer-term and more reliable tenants. For example, bigger families that can’t afford to buy in their preferred area. These homes often include spare bedrooms and more outdoor space. Plus, there aren’t too many available in Middlesbrough, so if yours is in a sought-after neighbourhood, it may get snapped up quickly. Sale prices are averaging £263,519 for four bedrooms, with a 3.83% (£841pcm) yield.
*Calculated using the most recent Middlesbrough property prices and rental rates from Home.co.uk.
Average rental yield by area of Middlesbrough
Selecting the right area to invest in is also crucial to achieving the best Middlesbrough rental yields. As mentioned, different neighbourhoods attract different types of tenants and variable rental rates. With that in mind, simply buying the cheapest house you can find might not be the best approach to getting the most from your budget. Instead, you should choose a property in an area suited to your target market and desired income. Here’s a brief summary of each postcode area in the town, including rent prices and potential yields for reference.
TS1
Avg. Property Price: £71,465 / Avg. Rent: £686pcm / Annual Gross Rental Yield: 11.52%
At the heart of Middlesbrough, TS1 encompasses the main shopping district, Town Hall, train/ bus stations, and Teesside University. As such, it has a sizeable student population living in private halls and shared terraced homes on short-term contracts. But, despite it being a hit with younger generations, there is a substantial amount of depravity and crime in this postcode. As a result, house prices are relatively low so that you could find a buy-to-let bargain.
TS2
Avg. Property Price: £49,833 / Avg. Rent: £875pcm / Annual Gross Rental Yield: 21.07%
To the north of the town and just across the river, you’ll find TS2. This includes Middlehaven – Middlesbrough’s oldest district – and the village of Port Clarence. Riverside Park Industrial Estate, The Transporter Bridge and Middlesbrough College are key landmarks. In fact, TS2 primarily consists of commercial spaces versus residential areas so that you won’t find many rental homes here. If one does come to market, it may be affordable, but demand will likely be relatively low.
TS3
Avg. Property Price: £83,029 / Avg. Rent: £611pcm / Annual Gross Rental Yield: 8.83%
TS3, on the other hand, is predominantly residential and popular with families seeking affordable housing close to local amenities. Key neighbourhoods include Berwick Hills and North Ormesby, and there are plenty of schools, parks and large supermarkets. Yet it is close to the town centre, and the well-known Riverside Stadium also sits at its most northerly point.
TS4
Avg. Property Price: £124,499 / Avg. Rent: £607pcm / Annual Gross Rental Yield: 5.85%
Another of Middlesbrough’s inner suburbs, TS4 is best known for James Cook University Hospital. As the region’s major trauma centre, with several specialist departments, the surrounding roads do get busy. Crime rates are also relatively high, but homes here do tend to be semi-detached with gardens. And there are multiple sports clubs, parks and even an outdoor velodrome.
TS5
Avg. Property Price: £158,099 / Avg. Rent: £696pcm / Annual Gross Rental Yield: 5.28%
Covering a large part of west Middlesbrough, TS5 includes highly popular neighbourhoods like Linthorpe, Acklam and Tollesby. Here, you’ll find various property styles, including many with period charm, suited to both couples and families. Plus good schools, green spaces and local shops. Residents are also just a stone’s throw from the town centre and connecting road links. Given its reputation, houses here do cost slightly more, but they’re typically better looked after.
TS6
Avg. Property Price: £135,110 / Avg. Rent: £662pcm / Annual Gross Rental Yield: 5.88%
If you’re considering investing in a buy-to-let property in TS6, it pays to do your research. While the south part of this area borders parks, woodland and several desirable neighbourhoods, the northern section is less favourable. Here, you’ll find Middlesbrough’s docks and several significantly deprived residential areas with comparatively high crime levels. Of course, homes here are some of the cheapest in Middlesbrough, but you may struggle to find reliable tenants.
TS7
Avg. Property Price: £223,243 / Avg. Rent: £992pcm / Annual Gross Rental Yield: 5.33%
Have the funds to purchase a buy-to-let in a highly sought-after area? Then Marton, Nunthorpe and Ormesby, located in TS7, are all great options. Situated on the edge of the North York Moors National Park, properties here tend to be more spacious with gardens—the rural backdrop appeals to various renters, from families to retirees and business professionals.
TS8
Avg. Property Price: £182,306 / Avg. Rent: £857pcm / Annual Gross Rental Yield: 5.64%
Alternatively, TS8 is equally popular for those who’d prefer to live on the edge of town. From Coulby Newham to Thornton, residents here will benefit from green surroundings and a range of local amenities. Think garden centres, shopping centres, top-rated schools and a local golf club. They’ll also be well connected by road and just a short drive from the centre of town.
*Calculated using Rightmove’s sales figures for each area and current rental rates from Home.co.uk.
As you can see, Middlesbrough’s best rental yields tend to be gained from properties closest to the town centre, given their affordability and high demand. With that said, if you’d prefer to rent to families and longer-term renters, we’d suggest looking a little further afield. Homes on the outskirts of Middlesbrough, in particular, hold their value well – perhaps due to their semi-rural location. The prospect of access to a garden, parking and spare bedroom enhances their appeal. For more information, please read about investing in Middlesbrough on our blog.
Or, if you’re thinking of selling your buy to let investment in Middlesbrough, look no further. Whether you aren’t happy with its location or it’s been left in a poor condition, don’t worry. Whatever the reason for the sale and wherever your home is situated, we can help you sell a tenanted property (or a vacant one) in a timeframe that suits you. Request a free cash offer now to get started.
